Only 30% of S&P Companies are Beating Revenue Estimates

This was Dave Wilson’s Chart of the Day yesterday, it’s got severely negative implications for next quarter’s earnings…

Growing disappointment with U.S. companies’ revenue may be a harbinger of lower profit margins, according to Myles Zyblock, chief institutional strategist at RBC Capital Markets.

As the CHART OF THE DAY shows, the gap has widened this quarter between the percentage of companies in the Standard & Poor’s 500 Index that are exceeding analysts’ sales projections and those coming out ahead on earnings. The figures are based on comparisons with average estimates in Bloomberg surveys.

Fewer than 30 percent of S&P 500 companies are delivering so-called positive surprises on revenue, according to the data. The proportion has fallen from 52 percent a year earlier. S&P 500 earnings surprises have been more consistent, falling to 64.5 percent from 69 percent during the period.